It’s a sobering thought that forecasters at Korn Ferry recently predicted that companies will be missing out on as much as $8.5 trillion in revenue by 2030, due to persistent talent shortages and vacancies going unfilled:
While the obvious answer is to try and hire more, HR practitioners will know that finding the right talent is easier said than done.
The same Korn Ferry study finds that, if we stick to the same shortage trajectory, there will be a global human talent shortage of more than 85 million people by the end of the decade.
But are there other ways CHROs can pursue to try and bridge this glaring talent gap?
I would argue yes – and it can be summed up just two words, global employment.
An organization is only as good as the talent it houses, so attracting the crème de la crème wherever they are in the world is the only way to hire today.
For companies looking to expand their teams, the whole world should be their oyster.
While a myopic approach may work in the short term, by patching up talent needs through domestic hiring, highly specialized technical skills are often hard to find within such a limited radius.
On the other hand, hiring globally exponentially increases the chances of finding the most fitting candidates for specialized roles in fields such as IT, engineering and manufacturing.
Limiting hiring to a specific location can be inefficient, because companies will likely struggle to find suitable candidates for their vacancies.
In the United States alone, there are around 8.5 million open jobs.
Global employment is often confused with remote work, but that’s a restrictive way to look at it.
Global employment doesn’t rely on employees working from any specific location; it’s truly limitless in its scope.
A company could hire globally and opt for a hybrid approach where employees sometimes work from the office and sometimes from home, or employees could work exclusively from their home bases.
Companies could also hire globally and relocate employees to office locations.
That said, when work is not bound by four walls, companies do have the choice to hire global employees remotely if they wish, cutting back on payroll costs and avoiding expenses associated with traditional office-based employment.
And given the prevailing trend of layoffs, many companies might take the opportunity to hire from other locations once hiring picks up.
When deciding to hire someone, an organization evaluates how much value that person can add to the company, with their quality of work potentially justifying the company’s investment in them.
A diverse, global workforce can foster innovation, creativity, and bring fresh perspectives to the table, taking productivity several notches up.
In purely business terms, they’ll make good money.
Moreover, working with those from beyond the home turf can expose an organization to a variety of cultural insights, experiences, market knowledge, and even untapped market opportunities, paving the way for possible international expansion and thereby increased revenue streams.
Operating across different time zones, globally distributed teams also enable round-the-clock productivity and client support, optimizing operational efficiency — an efficient follow-the-sun model of sorts.
An uninterrupted workflow can enhance customer satisfaction, increase service availability, and potentially lead to higher revenues as a result of improved client retention and acquisition.
Of course, companies that wish to hire from beyond their domestic talent pool may often be discouraged by the complexities that typically accompany the global hiring process – from the legal, administrative, and compliance aspects to begin with.
Wary of the potential hassle ahead, they might reconsider hiring internationally, wondering if it’s worth the bother.
It’s natural to worry about employing people from faraway lands where your company hasn’t set up shop.
Many questions will naturally abound. Things like ‘How can I ensure compliance with local labor laws and regulations?’ or ‘How can I ensure accurate payments in different currencies?’ Or maybe ‘What are the hidden costs and legal risks involved?
These are all valid questions that companies grapple with.
Setting up local entities in every country you want to hire from is out of the question due to the corresponding costs and complexities.
This is where an Employer of Record (EOR) can step in to employ people on behalf of businesses, alleviating any concerns about their lack of local presence in different jurisdictions. Managing payroll and taxes? Check. Ensuring compliance with local labor laws? Check.
Moreover, by assuming legal responsibility for these employees and handling obligations such as employment contracts, onboarding, and termination procedures, an EOR allows companies to enjoy the benefits of hiring from a global talent pool without getting bogged down by the administrative nitty-gritty.
While it’s important to expand hiring efforts globally, it’s equally important to ensure that compensation and benefits are at par with what is offered to local candidates and in tune with industry standards.
With an ongoing talent war, competing for in-demand skills on a global scale is no easy feat.
Certain expertise in structuring localized yet competitive compensation and benefits packages becomes indispensable to appeal to skilled workers spread across different regions. Luckily for employers, this is also something that comes within the scope of an EOR.
Outsourcing employment responsibilities to an EOR means companies can ensure compliance efficiently while managing a thriving international workforce. With reduced risk and lower administrative overhead, expanding globally or employing remote teams becomes much easier for companies, allowing them to focus on what matters most to them.
The real question is, with a shrinking pool of skilled talent, are you looking beyond your borders?
